2017 SHOPPING CENTER REPORT. Mid-America Real Estate Corporation

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1 2017 SHOPPING CENTER REPORT

2 2017 SHOPPING CENTER REPORT Written by Andy Bulson, Principal The development of new shopping centers throughout Chicagoland continues to hover between one and two million square feet of new retail development per year. While total square footage is decreasing, grocery projects are continuing to be the main driver of growth. The years of five million plus square feet of new retail are gone but grocery-driven projects and smaller footprint urban developments are here to stay according to Chicagoland 2017 Shopping Center Report by Mid-America Real Estate Corporation. Factoring a 26% decrease in shopping center development from 2.07 million square feet in 2015 to 1.5 million square feet in 2016, the 2017 Shopping Center Report anticipates another 31% decrease with approximately 1,060,000 square feet planned for the coming year. The data reveals that new shopping center development has decreased by 79% since 2005 and we are expected to hit an all-time low in The reality is retail, like other industries, is changing to adapt with customer expectations and preferences. While new construction is not as robust as previous years, adaptive reuse of existing retail space continues to offer an opportunity for expanding retailers, said Andy Bulson, Mid-America principal/director of suburban tenant representation and author of the Shopping Center Report. SMALL INCREMENTAL GROWTH IS DRIVEN BY MASS MERCHANDISERS Major national retailers are continuing to expand into different markets. Most of the growth we are seeing in the Chicagoland area is revolving around two specific mass merchandisers: Meijer and Wal- Mart. Meijer lead the growth category developing 387,000 square feet in The company added 192,000 square feet of retail space in Flossmoor, Ill and 195,000 square feet in Round Lake, Ill. Wal-Mart also sustained steady growth with two new locations opening in the Chicago suburbs in They expanded their presence by building a 182,000 square-foot store in Olympia Fields, Ill. and a 195,000 square-foot store in Richton Park, Ill. In the near-term, growth may slow down for this mass merchandiser as they don t have any plans for local new development in The size of the developments has decreased but the number of new developments and expansions has remained steady over the past three years. With 13 new developments in 2015 and 14 in 2016, there are 11 anticipated projects planned for Photo of Meijer in Flossmoor, Ill

3 2017 SHOPPING CENTER REPORT GOURMET GROCERY CONTINUES TO LEAD NEW DEVELOPMENT New development continues to revolve around gourmet grocery stores, specifically Mariano s Whole Foods. Ten of the 14 developed centers in 2016 were grocery-anchored, and seven (7) of the 11 planned centers in 2017 will be groceryanchored as well. We are still seeing residual growth in the grocery category largely the result of others pursuing the market share Dominick s once held, said Bulson. Given Kroger s recent acquisition, we expect to continue to see growth from Mariano s around Chicago and the suburbs. Whole Foods is also looking at two new developments in 2017 with plans for an 80,000 squarefoot location at the northeast corner of Belmont and Ashland Avenue in Chicago and a 330,000 square-foot, power center development at the southwest corner of 95th Street and Western Avenue in Chi-cago where the Whole Foods 365 concept will oc-cupy a 30,000 square-foot space. One large proj-ect focused around an existing Whole Foods, opensince2012,is Bond Companies Kildeer Village Square. Located at the northeast corner of Plum Grove and Rand Road in Kildeer, Ill., the 175,000 square-foot center will be anchored by junior-box tenants Nordstrom Rack, DSW, Nike, and Art Van Furniture. Photo of Mariano s at 39th Street & Martin Luther King Drive in Chicago Mariano s continued their growth with 214,704 square feet while Whole Foods completed 137,000 square feet. The gourmet grocer trend does not look to slow down in Mariano s is slated to open two new locations in 2017 totaling 143,000 square feet. The company plans to open 68,000 square feet at the northeast corner of Golf and Mount Prospect Road in Des Plaines, Ill. and 75,000 square feet at the southeast corner of Roosevelt and Finley Road in Lombard, Ill. Shopping center development Whole Foods is an excellent anchor for an upscale tenant line-up attracting consumers with more dis-posable income, said Bulson Gourmet grocery will continue to drive shopping center growth and provide an anchor for high-er-end, junior-box tenants in the Chicagoland area.

4 2017 SHOPPING CENTER REPORT SMALL RETAIL DEVELOPMENT CONTINUES WITH TARGET EXPRESS As we see a lot of activity around the gourmet grocery and mass merchandiser s new developments, Target Express is actively expanding their footprint in a smaller manner throughout densely populated areas in the city of Chicago. In 2016, Target Express opened a 20,000 square-foot store at the northeast corner of 53rd Street and Kimbark Avenue in Chicago. The smallest Target store format, hyper-tailored to the urban market, is making plans for 2017 with an additional 33,000 square-foot development at Dempster Street and Bronx Avenue in Skokie, Ill. The company is also planning two other developments for 2017, 29,000 square feet at Clark Street and Belmont Avenue in Chicago and 40,000 square feet at the southeast corner of Lake Street and Harlem Avenue in Oak Park, Ill. LOOKING AHEAD TO 2017 Although shopping center development will continue to hover around 1 to 2 million square feet, timing will dictate fluctuations in typical development for the future. Grocery-anchored and junior-box projects will drive the majority of development planned in the Chicagoland area in is a member of Mid-America Real Estate Group, a ChainLinks affiliate headquartered in Oakbrook Terrace, Ill. The company is the Midwest s leading full-service retail real estate organization with offices in Chicago, Milwaukee, Minneapolis and Detroit. For more information, call (630) or visit Rendering of Target Express at 53rd Street and Kimbark Avenue in Chicago(Target Corp.)

5 MID-AMERICA REAL ESTATE CORPORATION CHICAGOLAND 2017 RETAIL REPORT Summary TOTAL NUMBER OF CENTERS YEAR TOTAL DEVELOPMENT SQUARE FEET OPENING EXPANDING TOTAL ,397, ,075, ,433, ,585, ,262, ,857, ,499, ,414, ,069, ,631, ,807, ,680, ,130, ,559, ,035, ,034, ,382, ,701, ,727, ,184, ,025, ,139, ,264, ,651, ,065, ,535, ,060, TOTAL THRU ,518, ,020 TBA 36,345, ,000,000 Shopping Center Development 8,000,000 7,000, ,000,000 5,000,000 4,000, ,000,000 2,000,000 1,000, The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it.

6 MID-AMERICA REAL ESTATE CORPORATION CHICAGOLAND 2017 RETAIL REPORT 2016 CENTER DEVELOPER/OWNER ANCHORS SQ.FT. SQ.FT. DATE 1 NWC Rollins & Rte. 83 Meijer Meijer 195,000 S2016 Round Lake, IL 2 NWC York & I-290 Paragon LA Fitness 45,000 F2016 Elmhurst, IL 3 63rd & Suffield Bradford Mariano's 71,300 S2016 Westmont, IL 4 NWC Elston & Leavitt O'Toole Value City 37,000 F N. Broadway Barrett, Porto, Taxman Mariano's, Xsport 137,000 F th & MLK WBS Equities Mariano's 68,000 F th & Kedzie Sedgwick LA Fitness 40,000 S2016 Ps. 2 20,000 S rd & Halsted DL3 Realty Whole Foods 47,000 F st & Lake Park Antheus Capital Whole Foods, Marshalls, 90,000 F2016 Michaels 10 NEC 53rd & Kimbark Mesa Target Express 20,000 F2016 Ps.2 10,000 F SEC Airport & Weber Blain's Farm & Fleet Blain's Farm & Fleet 122,000 F2016 Romeoville, IL 12 Vollmer & Cicero Meijer Meijer 192,000 S2016 Flossmoor, IL 13 Route 30 & Western Ave. Walmart Walmart 182,000 F2016 Olympia Fields, IL 14 I-57 & Sauk Trail Walmart Walmart 195,000 S2016 Richton Park, IL Total 2016 Openings 1,441,300 Total 2016 Expansions 94,300 Grand Total 2016 Construction 1,535,600

7 MID-AMERICA REAL ESTATE CORPORATION CHICAGOLAND 2017 RETAIL REPORT 2017 CENTER DEVELOPER/OWNER ANCHORS SQ.FT. SQ.FT. DATE 1 NEC Rand & Plum Grove Bond Co's. Nordstrom Rack, Nike, 175,000 S2017 Kildeer, IL DSW, Art Van 2 NWQ Harlem & Lawrence Bradford Art Van 90,000 F2017 Harwood Heights, IL 3 Dempster & Bronx Blitzlake Target Express 33,000 F2017 Skokie, IL 4 NEC Gold & Mt Prospect Rd. Abbott Mariano's 68,000 S2017 Des Plaines, IL 5 SEC Roosevelt & Finley Bradford Mariano's 75,000 F2017 Lombard, IL 6 NEC Montrose & Broadway Keeler Ross 30,000 S Clark & Belmont Blitzlake Target Express 29,000 F NEC Belmont & Ashland Novak Whole Foods 80,000 S SWC Randolph & Morgan Sterling Bay Starbuck's/Anthropologie 20,000 F SEC Lake & Harlem Clark Street Target Express 40,000 F2018 Oak Park, IL 11 SWC 95th & Western Lormax Stern Carsons, DSW, Whole Foods, 330,000 F2017 Evergreen Park, IL Dick's, TJX Total 2017 Openings 970,000 Total 2017 Expansions 90,000 Grand Total 2017 Construction 1,060,000

8 Written by: Andy Bulson Principal Ashlee Yenney Corporate Marketing Director Mid-America Real Estate Group Illinois One Parkview Plaza, 9th Floor Oakbrook Terrace, Illinois Chicago 435 N Michigan Ave, Suite 2009 Chicago, Illinois Michigan Woodward Ave, Suite 100 Bloomfield Hills, Michigan Minnesota 5353 Wayzata Blvd, Suite 650 Minneapolis, Minnesota Wisconsin 600 N Plankinton Ave, Suite 301 Milwaukee, Wisconsin MidAmericaGrp.com